Stop saving for a rainy day when it's raining right now

The government should use its funds to reverse our ageing population

PUBLISHED : Friday, 07 March, 2014, 3:15am
UPDATED : Friday, 07 March, 2014, 3:21am

Financial Secretary John Tsang Chun-wah is well liked for his sense of humour and unassuming urbane bonhomie. But liking him is not synonymous with liking his 2014-15 budget.

While his various tactical manoeuvres to enhance Hong Kong's high-value-added competitiveness are welcomed, the same cannot be said of his savings proposals to avert the risk of the government incurring a structural deficit in the medium to long term because of an ageing population.

In fact, he has consistently erred on the side of caution, and many of his past estimated deficits have turned out to be embarrassing surpluses.

Besides, saving for a future rainy day by stuffing full the coffers flies in the face of economic development - for it is raining now. This paradoxical ambivalence of spending now or saving for the future is particularly obvious in tackling the problem of an ageing population.

On the one hand, the budget recognises the need to plan ahead for an ageing population to counter the impact of major constraints to the city's future economic development.

On the other, there is precious little in the budget to turn things around, particularly in the area of providing incentives for increasing the birthrate to effect a change in the population profile. In 30 years' time, one in three of our population will be elderly. Thirty years is a generation.

But rather than accepting the problems of an ageing population without challenge, we can act now with financial and infrastructural incentives to encourage more births.

Many career women I know are afraid of starting a family. The fear stems from a perception that they will have to give up work to care for the young family because of the scarcity of available crèches and childcare places. We need to free these women from such fear.

This means providing incentives for more crèches and childcare centres to be set up at or near workplaces to encourage women to return to work. Introducing flexible working hours, giving baby bonuses, and subsidising better spatial designs in housing might also help. Such incentives, if implemented, require funding - right now.

Let us not forget that the energy generated by human dynamism, which has made Hong Kong what it is today, is no accident. Hong Kong has survived in times of fiscal stringency and coped with the ups and downs of economic changes. Hong Kong has done well with forward-looking commonsense.

This is neither guru talk nor fearful warnings of dire consequences ahead. Fearful warnings may just backfire and lead to self-fulfilling prophecies.

Perhaps it is not fair to put the blame of inadequate policy considerations on the budget alone, as each policy area falls within the purview of different bureaus.

Yet the fiscal buck must stop somewhere. It must finally stop with the financial secretary.

Elizabeth Wong Chien Chi-lien was secretary for health and welfare from 1990 to 1994 and a lawmaker from 1995 to 1997